EMI dealmakers lose jobs in shake-up

Two senior dealmakers involved in Terra Firma’s £3.2 billion acquisition of the struggling record group EMI are leaving the private equity firm.
Source: Latest Business News from Times Online | 3 Dec 2008 | 10:17 pm

EDF offers $6.5 billion for Constellation assets (Reuters)

Reuters - EDF unveiled a $6.5 billion deal to buy 50 percent of Constellation Energy Group's nuclear business and some other assets in an attempt to torpedo a rival bid from Warren Buffett.

Source: Yahoo! News: Business | 3 Dec 2008 | 1:41 pm

Goldman Sachs & Online Bank, A Silly Notion (GS, ETFC)

Source: 24/7 Wall St. | 3 Dec 2008 | 1:32 pm

Earnings Watch: Updates, advisories and surprises

A roundup of the latest corporate earnings reports and what companies are saying about future quarters.

Source: MarketWatch.com - Top Stories | 3 Dec 2008 | 1:31 pm

Private sector loses 250,000 jobs - report

The U.S. economy shed a quarter-million private-sector jobs in November, according to a payroll processor's report that was worse than economists expected.
Source: Business and financial news - CNNMoney.com | 3 Dec 2008 | 1:28 pm

Economic Report: Private-sector sheds 250,000 jobs in November, ADP says

The U.S. private sector shed 250,000 jobs in November, the biggest job loss in six years, the ADP national employment index says.

Source: MarketWatch.com - Top Stories | 3 Dec 2008 | 1:27 pm

RIM hit as subscriber growth slows (Reuters)

Reuters - BlackBerry smartphone maker Research In Motion Ltd cut its third-quarter profit and revenue outlook well below Wall Street expectations, pointing to slower subscriber growth, weaker margins and sharp currency swings.

Source: Yahoo! News: Business | 3 Dec 2008 | 1:26 pm

Sweden won't buy Volvo, Saab

Read full story for latest details.
Source: Business and financial news - CNNMoney.com | 3 Dec 2008 | 1:24 pm

Nightmare on Wall Street continues

The hits just keep on coming for Wall Street.
Source: Business and financial news - CNNMoney.com | 3 Dec 2008 | 1:19 pm

Northern Rock delays repossession orders

Northern Rock, the nationalised mortgage lender, has joined a growing list of banks agreeing to help struggling homeowners by delaying the issue of repossession orders by six months.
Source: Latest Business News from Times Online | 3 Dec 2008 | 1:16 pm

EDF offers $6.5 billion for Constellation assets

PARIS/NEW YORK (Reuters) - EDF unveiled a $6.5 billion deal to buy 50 percent of Constellation Energy Group's nuclear business and some other assets in an attempt to torpedo a rival bid from Warren Buffett.
Source: Reuters: Business News | 3 Dec 2008 | 1:12 pm

Freeport-McMoRan suspends dividend, cuts output

NEW YORK (Reuters) - Freeport-McMoRan Copper & Gold Inc suspended dividend payments, slashed its 2009 capital expenditure budget and lowered copper output on Wednesday due to a slump in metal prices and its shares fell 13 percent.
Source: Reuters: Business News | 3 Dec 2008 | 1:06 pm

Stock futures drop on gloomy company outlooks

NEW YORK (Reuters) - Stock index futures fell on Wednesday after Research In Motion Ltd , a technology bellwether, slashed its outlook, compounding investors' fears about the deepening economic slump.
Source: Reuters: Business News | 3 Dec 2008 | 1:05 pm

M&S to hold second one-day sale

Marks and Spencer is to hold a second one-day, 20%-off sale on Thursday, as it aims to tempt hard-pressed shoppers.
Source: BBC News | Business | World Edition | 3 Dec 2008 | 1:05 pm

Stock futures drop on gloomy company outlooks (Reuters)

Reuters - Stock index futures fell on Wednesday after Research In Motion Ltd , a technology bellwether, slashed its outlook, compounding investors' fears about the deepening economic slump.

Source: Yahoo! News: Business | 3 Dec 2008 | 1:05 pm

RIM cuts profit outlook

Read full story for latest details.
Source: Business and financial news - CNNMoney.com | 3 Dec 2008 | 1:03 pm

Job cuts at highest level since '02

Jobs took another painful hit in November, with planned cuts rising to the highest level in seven years, according to a report released Wednesday by an outplacement firm.
Source: Business and financial news - CNNMoney.com | 3 Dec 2008 | 1:02 pm

Oil up above $47 ahead of U.S. inventory report

LONDON (Reuters) - Oil rose above $47 a barrel on Wednesday but the gains could be limited as further signs of weakening U.S. oil demand are expected to emerge in weekly data due out later in the session.
Source: Reuters: Business News | 3 Dec 2008 | 1:02 pm

Shaftesbury says West End will ride out downturn

One of the biggest property owners in London's tourist heartland said today that it was still seeing strong demand from restaurants and shops for its units.
Source: Latest Business News from Times Online | 3 Dec 2008 | 1:01 pm

Wal-Mart: A bully benefactor

Children who are forced to pick cotton in Uzbekistan, farmers scratching out a living in Guatemala and salmon fishermen in Bristol Bay, Alaska, would not seem to have much in common. But all are feeling the global impact of Wal-Mart.
Source: Business and financial news - CNNMoney.com | 3 Dec 2008 | 12:55 pm

UPDATE 1-Hydrodec says US plant to reach full capacity in 2009

Dec 3 (Reuters) - British transformer oil provider Hydrodec Group Plc said on Wednesday its first plant in the United States in Ohio was producing Superfine transformer oil at 50 percent capacity, and...
Source: Infocious RSS raw feed - channel BNewsBusiness | 3 Dec 2008 | 12:50 pm

London Markets: Stagecoach shares slide in downbeat London

Stagecoach underperforms a lower London market on Wednesday, with shares in the bus and rail operator slumping after it surprises investors with a downbeat outlook for its rail business.

Source: MarketWatch.com - Top Stories | 3 Dec 2008 | 12:49 pm

Indications: U.S. stock futures drop before data; Research In Motion warns

U.S. stock futures pointed to a weaker start Wednesday, with a warning from Research In Motion and expectations of further gloomy economic indicators casting a negative spell.

Source: MarketWatch.com - Top Stories | 3 Dec 2008 | 12:47 pm

Germany's Arcandor taps Telekom CFO as new CEO (AP)

AP - Retailer Arcandor AG said Wednesday its board has proposed Karl-Gerhard Eick, the outgoing chief financial officer for Deutsche Telekom, to become the new CEO with the aim of replacing Thomas Middelhoff next year.
Source: Yahoo! News: Business | 3 Dec 2008 | 12:44 pm

Oil price edges back over $48 a barrel$

Oil prices edged back towards $48 per barrel this morning, recovering slightly from a fall yesterday to levels more than $100 below a record high hit in July.$
Source: Latest Business News from Times Online | 3 Dec 2008 | 12:41 pm

Europe Markets: Oil producers, techs drag Europe stocks lower

European shares fall on Wednesday, pressured by losses for oil majors and a sharp sell-off for chip maker Infineon Technologies.

Source: MarketWatch.com - Top Stories | 3 Dec 2008 | 12:40 pm

Big rate drop sends mortgage applications soaring

Mortgage applications filed last week rose a seasonally adjusted 112.1%, compared with the week before, as borrowers rushed to lock in lower rates, according to the Mortgage Bankers Association’s weekly survey.

Source: MarketWatch.com - Top Stories | 3 Dec 2008 | 12:38 pm

EDF offers $4.5 billion for 50% Constellation nuclear stake

Nuclear power generator Electricite de France gets involved in a takeover battle with Warren Buffett Wednesday by offering to buy a 50% stake in Constellation Energy’s nuclear power business for around $4.5 billion.

Source: MarketWatch.com - Top Stories | 3 Dec 2008 | 12:38 pm

UPDATE 1-Vical licenses cancer drug to Turkey's Eczacibasi

Dec 3 (Reuters) - Biotechnology company Vical Inc signed a letter of intent with Turkey's Eczacibasi Ilac Pazarlama A.S. to market and sell its experimental cancer drug, Allovectin-7, in Turkey and...
Source: Infocious RSS raw feed - channel BNewsBusiness | 3 Dec 2008 | 12:34 pm

BlackBerry-maker hit as subscriber growth slows

LONDON (Reuters) - BlackBerry smartphone maker Research In Motion Ltd cut its third-quarter profit and revenue outlook well below Wall Street expectations, pointing to slower subscriber growth, weaker margins and sharp currency swings.
Source: Reuters: Business News | 3 Dec 2008 | 12:34 pm

UPDATE 5 -T.Italia eyes asset sales of nearly $4 bln, cuts jobs

* Still intends to grow in Brazil, keep fixed-line network
Source: Infocious RSS raw feed - channel BNewsBusiness | 3 Dec 2008 | 12:33 pm

German car downturn 'worst ever'

The German car market is suffering an unprecedented slowdown, the country's main trade body warns.
Source: BBC News | Business | World Edition | 3 Dec 2008 | 12:32 pm

Economic Report: Corporate layoffs surge to nearly 7-year high

Led by massive cuts at Citigroup and other banks, major U.S. corporations announced 181,671 layoffs in November, the highest total in nearly seven years, according to a survey conducted by outplacement firm Challenger Gray & Christmas and released on Wednesday.

Source: MarketWatch.com - Top Stories | 3 Dec 2008 | 12:31 pm

UPDATE 3-BlackBerry-maker hit as subscriber growth slows

* Cuts Q3 revenue outlook by 9 percent at $2.75-$2.78 bln
Source: Infocious RSS raw feed - channel BNewsBusiness | 3 Dec 2008 | 12:30 pm

Northern Rock extends repossessions grace period (AP)

AP - Northern Rock, the nationalized mortgage lender, said Wednesday it would wait at least six months before moving to repossess homes when payments fall behind.
Source: Yahoo! News: Business | 3 Dec 2008 | 12:29 pm

Dawnay Day property fund cuts links with collapsed conglomerate

The largest publicly-quoted property fund run by Dawnay, Day has formally severed its links with the collapsed financial services conglomerate. Dawnay, Day Treveria, which sits on a €2.2 billion portfolio of German retail properties, today terminated its management contract with Dawnay, Day and announced plans to change its name to Treveria.
Source: Latest Business News from Times Online | 3 Dec 2008 | 12:27 pm

Paulson debates next $350 billion in bailout: report

NEW YORK (Reuters) - Treasury secretary Henry Paulson is debating whether to ask Congress for the next $350 billion in the $700 billion U.S. bailout, the Wall Street Journal reported on its website on Tuesday.
Source: Reuters: Business News | 3 Dec 2008 | 12:26 pm

Republican retains crucial Senate seat

Saxby Chambliss, the Republican senator, easily won a run-off election in Georgia, denying Democrats the chance for a 60-seat 'super majority' that would have enabled them to pass legislation virtually at will
Source: Financial Times - US homepage | 3 Dec 2008 | 12:23 pm

Hawaii to build statewide electric car network

Silicon Valley startup Better Place signs deal with the governor and the state's biggest utility to build a network of charging stations across the Hawaiian islands.
Source: Business and financial news - CNNMoney.com | 3 Dec 2008 | 12:21 pm

UPDATE 1-Gazprom sees state co-funding bigger investments

UKHTA, Russia, Dec 3 (Reuters) - Russian gas export monopoly Gazprom may ask the state to co-fund its investments in 2009 as it wants them to rise by 12 percent to a record 920 billion roubles ($32.84...
Source: Infocious RSS raw feed - channel BNewsBusiness | 3 Dec 2008 | 12:21 pm

Citi and Amazon.com in rewards program partnership

SAN FRANCISCO (Reuters) - Financial services company Citigroup Inc said on Wednesday it had teamed its customer loyalty program with global online retailer Amazon.com Inc in what an executive said was the largest-ever rewards program.
Source: Reuters: Business News | 3 Dec 2008 | 12:18 pm

Citi and Amazon.com in rewards program partnership

SAN FRANCISCO (Reuters) - Financial services company Citigroup Inc said on Wednesday it had teamed its customer loyalty program with global online retailer Amazon.com Inc in what an...
Source: Infocious RSS raw feed - channel BNewsBusiness | 3 Dec 2008 | 12:18 pm

Mortgage applications surge by record amount (Reuters)

Reuters - Mortgage applications surged by the largest amount on record last week as a new Federal Reserve program pushed interest rates down to their lowest level in more than 3 years, data from an industry group showed on Wednesday.

Source: Yahoo! News: Business | 3 Dec 2008 | 12:13 pm

Movers & Shakers: Wednesday's biggest gaining and declining stocks

Among the companies whose shares are expected to see active trade in Wednesday’s session are the mining majors as well as Bed Bath & Beyond, Constellation Energy, Freeport McMoRan, Infineon, Marvell, Research in Motion and U.S. Steel.

Source: MarketWatch.com - Top Stories | 3 Dec 2008 | 12:11 pm

Obama to name Richardson for Commerce on Wednesday

President-elect Barack Obama is ready to name Bill Richardson as his choice for commerce secretary after passing over his vanquished Democratic rival for secretary of state. Democratic...
Source: Infocious RSS raw feed - channel BNewsBusiness | 3 Dec 2008 | 12:09 pm

European markets down ahead of Dow's expected fall

European stock markets fell modestly Wednesday after further dismal economic data and as Wall Street was heading towards a lower opening. Asian markets were higher after Wall Street's...
Source: Infocious RSS raw feed - channel BNewsBusiness | 3 Dec 2008 | 12:08 pm

Early Bird Analyst Downgrades (CEDC, IFX, OVTI, PALM, SNDA)

These are some of the early bird analyst downgrades and negative calls we have seen early this Wednesday morning:

• Central European Distribution (CEDC) Cut to Neutral at JPMorgan.
• Infineon (IFX) Cut to Sell at RBS.
• OmniVision Tech (OVTI) Cut to Underperform at Baird.
• Palm (PALM) Cut to Neutral at Merrill Lynch (late yesterday call).
• Shanda Interactive (SNDA) targets cut at Citigroup and Credit Suisse.

Jon C. Ogg
December 3, 2008

Source: 24/7 Wall St. | 3 Dec 2008 | 12:07 pm

Early Bird Analyst Upgrades (ACAP, BK, BBBY, BHP, GENZ, RTP, UBS)

These are some of the early positive analyst calls and analyst upgrades we are seeing this Wednesday morning:

• American Physicians (ACAP) Started as Buy at SunTrust Robinson.
• Bank Of NY Mellon (BK) Raised to Buy at Ladenburg Thalmann.
• Bed Bath & Beyond (BBBY) Raised to Market Perform at FBR.
• BHP Billiton (BHP) Raised to Buy at Citigroup.
• Genzyme (GENZ) Raised to Outperform at Oppenheimer.
• Rio Tinto (RTP) Raised to Buy at Citigroup.
• UBS (UBS) Raised to Buy at Societe Generale.

Jon C. Ogg
December 3, 2008

Source: 24/7 Wall St. | 3 Dec 2008 | 12:03 pm

Wall Street heads for lower open

Wall Street appeared headed for a lower open Wednesday as investors awaited more readings expected to show a still-weakening economy. News that BlackBerry maker Research In Motion was...
Source: Infocious RSS raw feed - channel BNewsBusiness | 3 Dec 2008 | 12:00 pm

Sweden ready to support but not buy Volvo, Saab

Sweden's Industry Minister Maud Olofsson says the government is ready to support U.S.-owned automakers Saab and Volvo but doesn't want to take over the troubled brands. She says Ford and
Source: Infocious RSS raw feed - channel BNewsBusiness | 3 Dec 2008 | 11:58 am

AIG, Fed stemming insurer's liquidity crisis

Troubled insurer American International Group moved another step closer to stabilizing its finances on Tuesday.
Source: Business and financial news - CNNMoney.com | 3 Dec 2008 | 11:54 am

Ex-AOL boss seeks funds for his firm, not Yahoo: report

(Reuters) - Former AOL Chief Executive Jonathan Miller is trying to raise capital for Velocity Interactive Group, an investment firm focused on digital media where he is a partner, and not for buying Yahoo Inc, the New York Post reported.
Source: Reuters: Business News | 3 Dec 2008 | 11:53 am

Verdict is in: Few jobs for legal grads

Employment opportunities for legal professionals have traditionally been plentiful - and lucrative. But as the economy has dried up, so too have those jobs.
Source: Business and financial news - CNNMoney.com | 3 Dec 2008 | 11:52 am

Currencies: Rate-cut expectations pressure euro, British pound

The European single currency and the British pound lose ground versus the dollar Wednesday, pressured by renewed risk aversion and expectations for big rate cuts by the European Central Bank and the Bank of England on Thursday.

Source: MarketWatch.com - Top Stories | 3 Dec 2008 | 11:52 am

Investors back Clive Cowdery's £600m Resolution

Resolution, Clive Cowdery's reinvented investment vehicle, is expecting a flurry of last-minute interest in its landmark flotation that could mean it raises as much as £600 million ahead of next week's listing.
Source: Latest Business News from Times Online | 3 Dec 2008 | 11:48 am

Big Three need $34 billion

Automakers submitted their turnaround plans to Congress Tuesday with the hopes of winning approval for a lucrative loan package they claim is necessary for their survival.
Source: Business and financial news - CNNMoney.com | 3 Dec 2008 | 11:46 am

Bail-out plan 'lacks oversight'

The US $700bn bail-out plan is being implemented without adequate safeguards, a Congressional watchdog says.
Source: BBC News | Business | World Edition | 3 Dec 2008 | 11:34 am

Telecom Italia to axe more jobs

Telecom Italia, burdened with a 37bn-euro debt, plans to cut an extra 4,000 jobs and sell non-core assets worth 3bn euros.
Source: BBC News | Business | World Edition | 3 Dec 2008 | 11:29 am

Is Google (GOOG) The Last Man Standing?

Analysts are of two minds about Google (GOOG). The first is that because it is the most efficient way for companies to reach customers that it will not be hurt much by the recession. As marketers trim budgets, Google will be the media industry mainstay because it is the best advertising tool ever invented.

The dissenters say that not even Google can survive a really big, bad recession without its revenue being beaten down. Some Wall St. types even think that Google's top line could shrink next year. That would end one of the greatest runs of success in the history of US business.

The pessimists are getting some support from Google's own actions. According to The Wall Street Journal, "Google is ratcheting back spending and cutting new projects." Is the move based on panic, or is it simply prophylactic?

There is reason to believe that Google will do just fine as the recession grows deeper and deeper. Cuts will improve margins. But, on the revenue side there are great opportunities which the company has never tapped. The world's largest search operation has billions of pages a month on which it runs no advertising at all.

There are no ads on Google Maps. a perfect place for national retailers and restaurants like McDonald's (MCD) and Sears (SHLD). Google News collects information from 4,500 sources, a perfect place to market The New York Times (NYT), Reuters, or USA Today. And, what of Google Books? Where are the ads from Barnes & Noble (BKS) and Amazon (AMZN)?

The recession will be a valuable less for Google. It has opportunities for revenue that it has never exploited. That will be more than enough to take it through hard times.

Douglas A. McIntyre

Source: 24/7 Wall St. | 3 Dec 2008 | 11:25 am

Automakers' desperate bailout plea gaining support (Reuters)

Reuters - A top lawmaker predicted Washington would approve a bailout for U.S. automakers after they submitted survival plans, and General Motors Corp and Chrysler LLC said they needed an immediate infusion of cash to avoid failures.

Source: Yahoo! News: Business | 3 Dec 2008 | 11:23 am

Automakers' desperate bailout plea gaining support

DETROIT/WASHINGTON (Reuters) - A top lawmaker predicted Washington would approve a bailout for U.S. automakers after they submitted survival plans, and General Motors Corp and Chrysler LLC said they needed an immediate infusion of cash to avoid failures.
Source: Reuters: Business News | 3 Dec 2008 | 11:23 am

Eurozone retail sales slump 2.1%

Retail sales across the 15 euro nations fell more than expected in October, increasing the chance of an interest rate cut.
Source: BBC News | Business | World Edition | 3 Dec 2008 | 11:15 am

Rice urges Pakistan to co-operate with India

Secretary of State Condoleezza Rice urged Pakistan to cooperate "fully and transparently" in investigations into the Mumbai attacks that have roiled India-Pakistan relations
Source: Financial Times - US homepage | 3 Dec 2008 | 11:07 am

Retail Sales Imploded In November (MA)

Mastercard (MA) has a unit which tracks retail sales. The numbers that it posted for November are almost too horrible to believe.

According to The Wall Street Journal, new data from MasterCard SpendingPulse shows that "sales fell 20% from year-ago levels at apparel and department stores combined, 24% at luxury stores and 25% at electronics stores."

No comment necessary.

Douglas A. McIntyre

Source: 24/7 Wall St. | 3 Dec 2008 | 11:02 am

How The Bailout Money Is Spent: It Was Your Day To Watch Paulson

The wonderful and extraordinary thing about big federal spending programs is that the government does not have enough people to keep track of how the money is used. Grifters are everywhere. So are the people who will spend $600 for the toilet seats on Nimitz-class aircraft carriers.

The Paulson bailout plan, also known at the TARP, is no exception to the rule. The General Accounting Office reports that there are no real checks-and-balances on how the fund works, whether the money is properly accounted for, and whether there are strong provisions in place for getting the cash back.

What the GAO analysis fails to acknowledge is that it does not matter.

The Treasury does not have enough people to spend the $700 billion, about half of which is committed. That means that finding personnel to follow the capital around is out of the question. Treasury Secretary Henry Paulson is out of work in two months. Getting him to care about oversight mechanisms is unlikely.

Most analysts believe that since the capital is going to large banks such as Citigroup (C), Goldman Sachs (GS), and Bank of America (BAC), that they will keep track of it. That assumes the same excellent self-regulation which helped start the credit crisis will perhaps this time work better.

By its nature, government spending is inefficient, and especially so when huge sums are being doled out in a matter of weeks. The trade-off is that, if the financial system is going to be saved, the normal accountability for spending has had to be suspended.

Maybe the next administration can hire people to figure out where all of the Paulson money went. It will be too late. By then, the banks will have renegotiated the terms of their capitalization because they will be in more trouble. The rules and regulations for who got what will have shifted significantly and the trail of what happened to all of that cash will have gone cold.

Douglas A. McIntyre

Source: 24/7 Wall St. | 3 Dec 2008 | 10:55 am

DFS advert banned for inflated sofas

An advertisement for DFS is banned by the Advertising Standards Authority because the sofas in it are misleadingly large.
Source: BBC News | Business | World Edition | 3 Dec 2008 | 10:52 am

Detroit's Unusually Fuzzy Logic (GM)(TM)(F)

The Big Three restructuring plans submitted to Congress make good bedtime reading. The programs are full of assumptions which, taken as a whole, indicate that the entire US car industry will be in exceptionally good shape in under three years.

The trouble with the plans is that most of the assumptions cannot be supported by any available facts, making them pure speculation about how the corporations which were once a pillar of American business can be made healthy again.

The GM (GM) plan is especially rich in fantastic detail. The largest of the American car companies wants $12 billion in loans which it says it can pay back by 2011.

GM says it is discussing "alternatives" with its Saturn retailers. It does not say whether those conversations will yield anything concrete. The dealers involved may decide to push GM's plans for the division back in its face. GM is also trying to dump Hummer, but it may have no takers.

On the balance sheet side of the program "GM plans to engage current lenders, bond holders and its unions to negotiate the needed changes" Those lenders, knowing that the firm is getting government loans, may simply say they want their money back. Banks are funny that way. The UAW may take a similar position

Of course, GM says it will build more energy-efficient cars. It does not have a specific forecast for how those will sell or whether it knows that electric cars, like the ones it is creating, will be more appealing than hybrids like the Toyota (TM) Prius.

Perhaps the biggest stretch in the GM plan is that the company will reduce costs so that it can be profitable in a market where domestic vehicles sales are between 12.5 million and 13 million a year. The firm gives no assumptions about what happens if its share of the total market drops from 21% to 16% over the next two or three years. Since its piece of US car sales has been diving, that is not an unfair way to look at GM's prospects.

Put another way, the GM plan and those from its peers are based on a view of the future which cannot be sustained by any real data and consequently that means Congress will have to hand them money based on a long shot.

Douglas A. McIntyre

Source: 24/7 Wall St. | 3 Dec 2008 | 10:37 am

RIM (RIMM) Warning Bad For Apple (AAPL)

RIM (RIMM) warned it would not make its numbers for the current quarter. Some of that is due to the value of the dollar. The balance is because a weak economy is hurting demand for its Blackberry products.

RIMM said revenue for fiscal Q3 would be $2.75-$2.78 billion. Preliminary revenue is lower than its previously forecast of $2.95-$3.10 billion.

RIMM said it would add 2.6 million new subscribers in the period, down from a previous forecast of 2.9 million.

That news is probably not good for Apple (AAPL) and its new 3G iPhone.

Analysts are already revising estimates for sales of the super-phone Oppenheimer has cut its forecast to 4.8 million from 7.5 million. JP Morgan has taken its number down to 7.1 million. Look at the spread of estimates and it shows that no one seems to have a reasonable picture of how the device will do.

An evaluation of the new quarterly estimates from Palm (PALM), RIM, and Nokia (NOK) would support the notion that the iPhone, despite its tremendous appeal, will do badly and that Apple's stock is ready for another big letdown.

Apple's stock is already off from a 52-week high of nearly $203 to $92.47. But, analysts still expect EPS to be a relatively strong $1.43 a share. A big miss on iPhone sales could drop that by $.10 or more.

The miracle at Apple may be coming to an end, not because its products have lost their luster but because it appears no one is immune from a deepening recession.

Douglas A. McIntyre

Source: 24/7 Wall St. | 3 Dec 2008 | 10:17 am

Calls grow for steep rate cut as services deteriorate

Read the Tempus analysis on the services sector
Source: Latest Business News from Times Online | 3 Dec 2008 | 9:53 am

Australia open to Qantas and BA merger

The UK carrier is exploring a potential merger with its Australian rival via a dual-listed company structure, the boldest move yet considered to accelerate the consolidation of the global airline industry
Source: Financial Times - US homepage | 3 Dec 2008 | 9:42 am

Large cut in Thai interest rates

Thailand's central bank cuts interest rates by the biggest amount in eight years, as it aims to lift an economy hit by unrest.
Source: BBC News | Business | World Edition | 3 Dec 2008 | 9:39 am

Infineon posts another large loss

German chipmaker reports a seventh straight quarterly net loss because of falling chip prices and weakening demand.
Source: BBC News | Business | World Edition | 3 Dec 2008 | 9:18 am

Stagecoach shares dive 20% on rail warning

Shares in Stagecoach Group fell more than 20 per cent this morning after the bus and train operator said it was cutting jobs in its UK rail business to offset the effects of recession.
Source: Latest Business News from Times Online | 3 Dec 2008 | 9:15 am

Merging banks to help small firms

Lloyds TSB and HBOS, which are in the process of merging, both announce support packages for small businesses.
Source: BBC News | Business | World Edition | 3 Dec 2008 | 9:14 am

Media Digest 12/3/2008 Reuters, WSJ, NYTimes, FT, Bloomberg

According to Reuters, a bailout of US car companies gained support in Congress as GM (GM) and Chrysler said they needed money immediately to stay in business.

Reuters reports that Merrill will cut bonuses by about half.

Reuters writes that Paulson is debating about what to do with the $350 billion remaining in his bailout fund.

Reuters writes that Goldman Sachs (GS) and Morgan Stanley (MS) may have huge Q4 losses.

Reuters reports that Goldman Sachs is looking at creating an internet bank.

Reuters reports that Islamic finances are no longer immune to the downturn.

Reuters writes that RIM (RIMM) cut forecasts for its fiscal third quarter.

Reuters reports that AIG (AIG) and the government have come to an agreement to clear the insurer of about $50 billion in toxic assets.

Reuters writes that The New York Times (NYT) will take a charge for closing it distribution unit.

The WSJ writes that a Mastercard (MA) study shows retail sales dropped sharply in November.

The Wall Street Journal reports that Google (GOOG) is cutting spending as the recession progresses.

The Wall Street Journal reports that UK banks are being hit by defaults.

The Wall Street Journal reports that GE (GE) will revamp its financial unit to improve its results.

The Wall Street Journal reports that the ex-AOL CEO is working on a deal to take control of Yahoo! (YHOO).

The Wall Street Journal reports that a large fund in China said investing in US banks was risky.

The Wall Street Journal reports that HP (HPQ) and Citigroup (C) brought in billions of dollars with bond offerings.

The Wall Street Journal reports that the ISM nonmanufacturing index should show a sharp drop for November.

The Wall Street Journal reports that the Fed's "beige book" should show a contraction in economic activity.

The Wall Street Journal reports that Fidelity is opening some funds to new investments to offset redemptions.

The Wall Street Journal reports that China is seeking equipment makers to bid on its huge 3G roll-out.

The Wall Street Journal reports that BA (BA) and Qantas are considering a merger.

The Wall Street Journal reports that most airlines will further cut capacity.

The Wall Street Journal reports that MySpace (NWS) will offer a video applications for phones.

The Wall Street Journal reports that chip makers are taking a hit from slowing demand.

The Wall Street Journal reports that Alcatel (ALU) unveiled a deal with China Telecom

The Wall Street Journal reports that retailers are expecting to report more insolvencies this year.

The New York Times reports that UnitedHealth (UNH) "will sell the right to buy an individual health policy in the future even if you become sick."

The New York Times reports that GE (GE) said it would hit the lower end of its profit forecasts for Q4.

The New York Times reports that auditors are urging more controls on the federal bailout.

The FT reports that the Fed will extend some of its emergency lending facilities.

The FT reports that Icahn has filed a suit against Realogy.

Bloomberg reports that UBS says a market recovery could put the S&P up over 50% next year.

Douglas A. McIntyre

Source: 24/7 Wall St. | 3 Dec 2008 | 8:48 am

Anglo Irish axes dividend amid rising bad debt

Anglo Irish Bank, the most exposed of the Republic’s banks to the country's tumbling property market, has scrapped its final dividend and taken a €500 million provision against future bad debts.
Source: Latest Business News from Times Online | 3 Dec 2008 | 8:37 am

Asia Markets And Europe Open 12/3/2008

Markets in Asia rose.

The Nikkei was up 1,8% to 8,004.

The Hang Seng rose 1.9% to 13,654.

The Shanghai Composite was up 4% to 1,965.

At the open, the FTSE was off .2% to 4,116. The Dax was down .7% to 4,498 and the CAC 40 was off .2% to 3,147.

Data from Reuters.

Douglas A. McIntyre

Source: 24/7 Wall St. | 3 Dec 2008 | 8:14 am

Broadcasters' web TV 'limits competition'

Plans for a linked video-on-demand service from the BBC, ITV and Channel 4 were thrown into disarray today after regulators ruled that the joint venture project is anti-competitive.
Source: Latest Business News from Times Online | 3 Dec 2008 | 8:09 am

Hey FCC, let parents be the Internet censors

Kevin Martin, the agency's chief, wants to provide free wireless access, but he wants it filtered for porn and other objectionable material. That's not the job of the government. ...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 3 Dec 2008 | 8:00 am

Dreaming of a $30-billion deal for Yahoo

A former AOL executive says he can raise the capital to buy the Internet firm for $20 to $22 a share. Yahoo Inc...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 3 Dec 2008 | 8:00 am

Shanghai abuzz over possibility of a new Disneyland

Many Chinese believe it's just a matter of weeks, if not days, before a deal is announced for a theme park in the Asian nation's largest city. But a Disney spokeswoman says there's no deal.

For two decades Chinese officials and Walt Disney Co. have batted around ideas for a theme park in the eastern fringes of Shanghai, only to see them go nowhere.

Source: L.A. Times - Business | 3 Dec 2008 | 8:00 am

General Motors and Ford CEOs putting their salary on the line

The offer to work for $1 a year if an auto industry bailout is approved would mean a huge pay cut for Rick Wagoner and Alan Mulally.

Working for a buck a year would amount to a multimillion-dollar pay cut for the chief executives of General Motors Corp. and Ford Motor Co.

Source: L.A. Times - Business | 3 Dec 2008 | 8:00 am

Solar thermal projects gather steam -- and opposition

Scores of grand-scale facilities are proposed for California. Their possible effect worries environmentalists and others.

Just up the road, past pump jacks bobbing in California's storied oil patch, look sharp and you'll catch a glimpse of the state's energy future.

Source: L.A. Times - Business | 3 Dec 2008 | 8:00 am

SAG faction urges caution in strike vote

Some supporters say an e-mail from the Unite for Strength group is a signal to oppose strike authorization. In...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 3 Dec 2008 | 8:00 am

GM says it could fail in a matter of weeks

'There is no Plan B,' an executive says. The Big Three automakers now seek as much as $34 billion in U.S. aid.

Turning to Washington for a lifeline, General Motors Corp. has asked lawmakers for up to $18 billion to stave off collapse, promising in return to slash executive pay and jettison its poorly performing brands.

Source: L.A. Times - Business | 3 Dec 2008 | 8:00 am

Hey FCC, let parents be the Internet censors

Kevin Martin, the agency's chief, wants to provide free wireless access, but he wants it filtered for porn and other objectionable material. That's not the job of the government.

Universal Internet access sounds great. But not the way the head of the Federal Communications Commission envisions it.

Source: L.A. Times - Business | 3 Dec 2008 | 8:00 am

SAG faction urges caution in strike vote

Some supporters say an e-mail from the Unite for Strength group is a signal to oppose strike authorization.

In a sign of rising tensions within the Screen Actors Guild, the group representing a moderate faction of actors within the union is urging its supporters to think long and hard before casting a ballot for a strike authorization vote.

Source: L.A. Times - Business | 3 Dec 2008 | 8:00 am

Yahoo shares climb on hopes for $30-billion takeover bid

SAN FRANCISCO -- Yahoo Inc.'s stock rallied today on a report that AOL's former chief executive believes he can raise enough money in a worsening recession to buy the struggling Internet company for as...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 3 Dec 2008 | 8:00 am

More people checking out the library to save money

Libraries are seeing a rise in traffic as frugal book and movie fans look to borrow rather than buy.

On a recent morning, television journalist Heather Downie was carrying so many books, CDs and DVDs that it looked as if she'd need a shopping bag to get them to her car.

Source: L.A. Times - Business | 3 Dec 2008 | 8:00 am

General Motors and Ford CEOs putting their salary on the line

The offer to work for $1 a year if an auto industry bailout is approved would mean a huge pay cut for Rick Wagoner and Alan Mulally. ...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 3 Dec 2008 | 8:00 am

Securities-fraud suit against Countrywide OKd

COURTS Judge OKs suit against Countrywide

Source: L.A. Times - Business | 3 Dec 2008 | 8:00 am

Solar thermal projects gather steam -- and opposition

Scores of grand-scale facilities are proposed for California. Their possible effect worries environmentalists and others. ...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 3 Dec 2008 | 8:00 am

Timing tricky for SAG contract demand

In expectation of a future online bonanza, the Screen Actors Guild stands firm on pay for Internet shows even as hard times prompt the studios that produce them cut back.

As Hollywood braces for what could be its second labor walkout in a year, the fundamental contract issue dividing the Screen Actors Guild and the major studios is what the future holds for online entertainment.

Source: L.A. Times - Business | 3 Dec 2008 | 8:00 am

These lawyers got (video) game

Firms retool their entertainment practices to cater to the video game industry.

A year ago, newly minted lawyer Shawn Foust approached a senior partner at his Century City firm with an idea: dedicate an entire practice to the video game industry. ¶ Today, the 26-year-old coordinates a team of 20 lawyers at Sheppard, Mullin, Richter & Hampton that tackles mergers, licensing contracts and other deals that help make the burgeoning game business hum. ¶ "I'm pursuing my lifelong dream of combining the two things I love -- games and law," Foust said. ¶ Never a group to steer clear of the action, lawyers across California are retooling their entertainment practices to cater to the game industry. Video games are expected to generate nearly $50 billion in global revenue this year, despite a slowdown in consumer spending, and sales have already surpassed old-line businesses including music. ¶ As the game industry grows, so do its legal needs. ¶ "There's tax work, litigation, risk management, immigration, labor -- the list goes on and on," said Seth Steinberg, who last year left his position as general counsel of George Lucas' video game publisher, LucasArts, to start a private practice in San Francisco specializing in the game industry. ¶ Other firms have joined in. Greenberg Glusker Fields Claman & Machtinger, the law firm of record for the likes of Tom Cruise and Warren Beatty, has cultivated a game practice led by Stephen Smith and Suann MacIsaac.

Source: L.A. Times - Business | 3 Dec 2008 | 8:00 am

GM says it could fail in a matter of weeks

'There is no Plan B,' an executive says. The Big Three automakers now seek as much as $34 billion in U.S. aid. ...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 3 Dec 2008 | 8:00 am

Wall Street bounces back; Dow climbs 270 points

Upbeat Ford and GE news spurs buyers. Dow rises 270 points. The stock market rebounded Tuesday from Monday's sharp...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 3 Dec 2008 | 8:00 am

Boeing, Northrop Grumman lose bids to build satellites in Southern California

Lockheed Martin clinches a $1.1-billion contract sought by Boeing and Northrop. In a major setback for satellite-making...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 3 Dec 2008 | 8:00 am

W.R. Grace settles asbestos class-action suit

The company made an attic insulation placed in millions of homes. W.R. Grace & Co. has agreed to pay as much...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 3 Dec 2008 | 8:00 am

Aussie stocks start comeback

MELBOURNE - The Australian stock market closed marginally higher as figures showed that economic growth had slowed to a crawl in the September quarter. At the 1615 AEDT close, the benchmark S&P/ASX200 index had risen 5.6...
Source: New Zealand Herald - Business | 3 Dec 2008 | 7:48 am

Aust dollar closes stronger

SYDNEY - The Australian dollar has closed almost one US cent higher after after a positive finish on Wall Street supported investor confidence. The local currency was stronger despite data showing the Ausralian economy had...
Source: New Zealand Herald - Business | 3 Dec 2008 | 7:46 am

Oil up on production cut prospect

Oil prices have risen after falling more than $100 from July's peaks, but stockpile data may reverse the gains.
Source: BBC News | Business | World Edition | 3 Dec 2008 | 7:24 am

Goldman mulling Internet banking operation: report (Reuters)

Reuters - Goldman Sachs Group Inc is considering launching an Internet banking operation, The Wall Street Journal reported, citing people familiar with the situation.
Source: Yahoo! News: Business | 3 Dec 2008 | 6:48 am

Goldman mulling Internet banking operation: report

(Reuters) - Goldman Sachs Group Inc is considering launching an Internet banking operation, The Wall Street Journal reported, citing people familiar with the situation.
Source: Reuters: Business News | 3 Dec 2008 | 6:48 am

Solid lift for NZ sharemarket

The New Zealand sharemarket closed higher after equities in the United States spurted higher in late trade. The benchmark NZSX-50 index closed up 55.643 points, or 2.099 per cent, at 2706.788, having yesterday closed down nearly...
Source: New Zealand Herald - Business | 3 Dec 2008 | 6:26 am

NZ money market quiet

The New Zealand dollar traded around the US53c level ahead of the much-anticipated interest rate announcement by the Reserve Bank tomorrow morning. The NZ dollar was trading at US53.15c by 5pm from US53.00c at 8am and US52.90c...
Source: New Zealand Herald - Business | 3 Dec 2008 | 5:55 am

Milkpowder prices dive in Fonterra online auctions

Fonterra says whole milkpowder prices today fell for a fifth time in its internet auctions, taking them to their lowest in more than two years. Fonterra's trading manager, CRA International, said the average price across all products...
Source: New Zealand Herald - Business | 3 Dec 2008 | 4:00 am

Icahn files lawsuit against Realogy

The billionaire investor claims that the planned $1.1bn debt exchange of the property brokerage group owned by Leon Black's Apollo Management is a 'fraudulent' transfer of money
Source: Financial Times - US homepage | 3 Dec 2008 | 3:37 am

Top banker sees new hope for SOE privatisation- Genesis bond sale a success

State owned enterprises' need for capital in the coming downturn could be an opportunity for them to access capital markets directly, a leading investment banker says. Rob Cameron sees the listing and issuing of non-voting shares...
Source: New Zealand Herald - Business | 3 Dec 2008 | 3:30 am

Australian economy barely growing

CANBERRA - The Australian economy barely grew in the three months to September, backing the Reserve Bank's decision to slash interest rates. Economic growth crawled to its slowest pace in eight years, rising by just a seasonally-adjusted...
Source: New Zealand Herald - Business | 3 Dec 2008 | 3:00 am

Downturn puts a stop to projects

The economic downturn has caused "a substantial number" of large Auckland building projects to be put on hold. Zoltan Moricz of consultants CB Richard Ellis said 50,000sq m of commercial and industrial building work in Auckland's...
Source: New Zealand Herald - Business | 3 Dec 2008 | 2:30 am

Recession is latecomer to Minn. suburb

Edina, Minn., a wealthy, mostly white-collar suburb of Minneapolis, has not seen the upheavals of the economic crisis that have hit other cities -- yet. Annie Baxter reports.
Source: Marketplace | 3 Dec 2008 | 2:20 am

US carmakers ask for $34bn

Detroit's beleaguered carmakers sought to present themselves as lean, innovative and environmentally aware companies as they appealed to Congress for up to $34bn of emergency loans
Source: Financial Times - US homepage | 3 Dec 2008 | 2:01 am

Humbled automakers go cap in hand to Congress

WASHINGTON - Humbled and fighting for survival, Detroit's once-mighty automakers appealed to Congress with a retooled case for a bailout as large as US$34 ($65.44) billion, pledging to slash work forces, car lines and executive...
Source: New Zealand Herald - Business | 3 Dec 2008 | 2:00 am

Gates 'less concerned' about Iraq troop removals

Robert Gates, the US defence secretary who will remain as Pentagon chief in the Obama administration, said he was 'less concerned' about President-elect Barack Obama's 16-month timetable to remove combat troops from Iraq
Source: Financial Times - US homepage | 3 Dec 2008 | 1:47 am

Receivership vs moratorium: Making the call

Investor confidence has been severely tested over the past 18 months as finance companies have collapsed or frozen repayments. Investigating these failures is a major enforcement priority for the Securities Commission. The commission...
Source: New Zealand Herald - Business | 3 Dec 2008 | 1:30 am

Helping homeowners stretched too far

What's it like for consumers who are trying to get out from under mortgages they can't afford? Kai Ryssdal finds out from Fred Glick of U.S. Loans Mortgage in Philadelphia.
Source: Marketplace | 3 Dec 2008 | 12:53 am

After The Close - Tuesday

LOCKHEED MARTIN (LMT) won a $1.1 bil contract to build weather satellites for NASA and NOAA, besting Boeing (BA) and Northrop Grumman (NOC)....

Source: Investor's Business Daily: BUSINESS | 3 Dec 2008 | 12:26 am

Business Briefs - Tuesday

Staples beats, touts cost savings. Staples beats, touts cost savings

Source: Investor's Business Daily: BUSINESS | 3 Dec 2008 | 12:26 am

Defense Supplier Banks On Being Low-Cost Maker Of Satellite Gear

Last week, President-elect Obama said he would set up a team to save money in the federal budget.

Source: Investor's Business Daily: BUSINESS | 3 Dec 2008 | 12:26 am

In Brief - Tuesday

CME (CME), the largest derivatives exchange, said its Nov. trading volume fell 29% from a year ago. Shares dipped 4 cents to 172.60.

Source: Investor's Business Daily: BUSINESS | 3 Dec 2008 | 12:26 am

GE expects to miss profits forecast

General Electric says it will miss its annual profits forecast and warned that the credit crisis would continue to take its toll on the company's finance arm for at least another year
Source: Financial Times - US homepage | 3 Dec 2008 | 12:19 am

VIX Index of U.S. Stock Option Prices Retreats 8.1% to 62.98

Source: Bloomberg - All Podcasts | 2 Dec 2008 | 11:16 pm

RF Lafferty's Froewiss Sees Industrial ETFs Grow In Recession

Source: Bloomberg - All Podcasts | 2 Dec 2008 | 11:11 pm

How the ascent of money led to crisis

Niall Ferguson, author of "Ascent of Money," talks with Kai Ryssdal about how competition between banks and their drive to boost share prices has led to today's financial mess.
Source: Marketplace | 2 Dec 2008 | 10:50 pm

Total considers bid for Nexen

French oil and gas group thrashing out details of a possible bid worth up to C$20bn for mid-sized Canadian
Source: Financial Times - US homepage | 2 Dec 2008 | 10:41 pm

TSX takes hit from Manulife and ends lower (Reuters)

Reuters - The Toronto Stock Exchange's main index ended a see-saw session lower on Tuesday as news that insurer Manulife Financial will issue new stock offset rallying energy shares after talk of a takeover of Nexen Inc.
Source: Yahoo! News: Business | 2 Dec 2008 | 10:04 pm

JPMorgan's Feroli Sees U.S. Housing Bottom in 2009

Source: Bloomberg - All Podcasts | 2 Dec 2008 | 10:02 pm

Last round of pleas from the Big 3

The Big Three automakers return to Congress this week to present improvements they'll make if they get bailouts. Kai Ryssdal asks industry analyst Eric Noble if smaller business models, green technology and executive pay cuts are enough.
Source: Marketplace | 2 Dec 2008 | 9:42 pm

Oil prices fall to 3½-year lows

Oil prices sank to their lowest level in three-and-a-half years amid fresh concerns that the Opec oil cartel may not reduce its production level as much as it has promised
Source: Financial Times - US homepage | 2 Dec 2008 | 9:33 pm

Fed extends its emergency lending

The US Federal Reserve said it was extending the life of three emergency lending programmes aimed at thawing the credit markets in the light of the continuing turmoil in the financial system
Source: Financial Times - US homepage | 2 Dec 2008 | 8:30 pm

Oppenheimer's Whitney Says Home Prices to Keep Dropping

Source: Bloomberg - All Podcasts | 2 Dec 2008 | 8:06 pm

BlackRock's Fisher Says U.S. Won't Face `Japanese Deflation'

Source: Bloomberg - All Podcasts | 2 Dec 2008 | 8:05 pm

S&P's Schulz Says U.S. Automakers Will Receive Federal Funds

Source: Bloomberg - All Podcasts | 2 Dec 2008 | 7:08 pm

When Fed rate hits zero, what's next?

If the Federal Reserve lowers its interest rate to zero -- and there have been indications that might happen -- it can't go any lower. So, what's left? Nancy Marshall Genzer reports.
Source: Marketplace | 2 Dec 2008 | 5:18 pm

Now Goldman Sachs could post loss

Goldman Sachs seems to have avoided the financial crises of its Wall Street rivals so far, but it's expected to post its first quarterly loss in almost a decade. Alisa Roth reports.
Source: Marketplace | 2 Dec 2008 | 5:18 pm

New wave of delinquencies on the way

A new forecast sees delinquent mortgages nearly doubling by the end of next year. Homeowners with adjustable-rate mortgages, in particular, are in danger of getting squeezed. Jeff Tyler reports.
Source: Marketplace | 2 Dec 2008 | 5:16 pm

Palm Cut to `Neutral' From 'Buy' by Merrill on Consumer Slump

Source: Bloomberg - All Podcasts | 2 Dec 2008 | 4:58 pm

Channel's Lucaci Sees `Total Reshaping' of Hedge Fund Industry

Source: Bloomberg - All Podcasts | 2 Dec 2008 | 4:55 pm

Sorrentino Sees Opportunities for Gains in U.S. Corporate Bonds

Source: Bloomberg - All Podcasts | 2 Dec 2008 | 4:53 pm

Pointon's Nightingale Says Saving Banks Was a `Mistake'

Source: Bloomberg - All Podcasts | 2 Dec 2008 | 4:51 pm

Gee, G.E.

General Electric has outlined its battle plan to fight the financial crisis, seeking to preserve its triple-A rating and its dividend.

The conglomerate—whose businesses range from NBC to turbines—said it expected to report fourth-quarter earnings at the low range of its previous forecast. It sees earnings of 50 to 52 cents per share. Analysts have been expecting a profit of 51 cents per share.

Nervous investors have been focusing on G.E.'s giant finance unit, G.E. Capital, amid concerns that it could become the next casualty of the financial crisis. Shares of G.E. have slumped 58 percent this year. The company today detailed how it will shrink G.E. Capital and reduce its leverage. Jobs will be cut and the unit will depend less on the commercial paper market and seek some $80 billion in alternative funding. G.E. will take a charge of as much as $1.4 billion to pay for cost cuts and restructuring.

"We are taking a number of tough but prudent actions to make G.E. Capital safer, stronger, and more secure during this financial crisis," said Keith Sherin, the company's chief financial officer. "We are committed to being a Triple-A company. These actions include a funding plan that reflects the current market, and we are lowering our leverage ratio and commercial-paper balance. Our forecast anticipates a challenging loss environment. We are also reorganizing the business to reduce costs and allocate capital more efficiently."

G.E. Capital made clear that it would not tap the $700 billion TARP program (which could spark fears of share dilution among investors), but it is taking advantage of two other federal programs: the Federal Reserve's facility to backstop commercial paper and the Federal Deposit Insurance Corp.


Related Links
Will $700 Billion Be Enough?
Fed Economists Duel Over Crisis 'Myths'
Sign of a Bottom?


Source: Portfolio.com: Top 5 | 2 Dec 2008 | 2:00 pm

Goldman's Struggles

It is obvious that the business of Wall Street has changed utterly. Goldman Sachs, which had been so clever to profit handsomely last year from the collapse in the subprime mortgage market, has yet to figure how to make money in this new era.

The firm could report a loss of as much as $2 billion, or $5 per share, when it reports fourth-quarter results next week, the Wall Street Journal reports, citing "industry insiders."

Such a loss—which would be the firm's first since it went public in 1999—would top even the most pessimistic of the analysts covering Goldman. On Monday, Susan Roth Katzke of Credit Suisse said she expected Goldman to report a loss of $4 per share for the quarter, which ended on November 28. Her report helped send shares of Goldman tumbling 17 percent on Monday.

"October was a difficult month; November—though we were hopeful—was really no better, with asset prices for equities, credit, and real estate only coming under more pressure," she wrote.

The firm's stake in Industrial and Commercial Bank of China Ltd. and some private equity investments have declined in value in recent months.

The Journal points to problems in Goldman's distressed investments—like golf courses in Japan and troubled auto loans in Thailand—that had been a big profit center.

Other analysts see a more modest loss for the quarter. Prashant Bhatia of Citigroup has forecast a loss of $1.60 per share, while Michael Mayo of Deutsche Bank estimates a loss of 65 cents per share. The consensus estimate, according to analysts surveyed by Thomson Reuters, is a loss of 62 cents per share for the quarter.

It is not as if Goldman has not been responding to the challenge of the financial crisis. The firm has converted to a bank holding company and it has bolstered its capital: selling $5 billion of preferred stock to Warren Buffett, $6 billion of stock in a public offering, and $10 billion of preferred stock to the Treasury. And it has been cutting jobs and shedding assets.

In a speech last month, Lloyd Blankfein, the chief executive of Goldman, acknowledged the new challenges. "We are in the midst of a historically significant and uncertain time for business and the global economy," he said.

Yet he was confident that Goldman would survive and prosper: "I have not lost sight of the fact that many of the most important opportunities in Goldman Sachs's history came about during times of stress. Our firm has proven its ability to adapt time and again, and, more than any other factor, our culture has given us the wherewithal to embrace change."

It has usually not been a good idea to bet against Goldman. But a huge headline loss next week—especially if Morgan Stanley's results look better in comparison—might go a long way toward puncturing the last of Wall Street's myths: that Goldman is a firm of the best and brightest whose unique culture allows it to find and pursue profitable opportunities in any environment.

Perhaps Goldman is not so special after all?


Related Links
Wall Street Huddles for Safety
Wall Street's New Realities
Saving Wall Street From Itself


Source: Portfolio.com: Top 5 | 2 Dec 2008 | 1:00 pm